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CannTech: what you should know about cannabis technology market

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Cannabis consumption and sales keep growing in the U.S. – and so does the tech that helps facilitate it. Booming cannabis market inevitably attracts the attention of tech innovators, who have been actively coming up with ideas and products, collectively referred to as cannabis technology, or canntech.

Being a relatively new phenomenon, canntech is already considered one of the most attractive investment opportunities in the cannabis space by VCs. In 2019, information about this market is becoming accessible for non-professional investors as well: through industry-specific websites and world’s leading media that are paying increasing attention to cannabis news. Some of the world’s first public events dedicated to cannabis market have also taken place this year, including CannTech Summit in Silicon Valley.

However, there is still little open information about the investment opportunities around this important sector of cannabis industry. Valuation420 initiative is aimed at closing this gap by providing investors with open information on theory and practice of investing in cannabis space. 

This article breaks down canntech as an investment category for the newcomers to this market.

What is canntech: growing, delivering and consuming

When somebody refers to canntech, they usually mean one of the following:

  • products for cannabis consumption, i.e. vaporizers, dosers (PAX, Dosist)
  • e-commerce platforms and delivery apps (Eaze)
  • cannabis home grow systems (Leaf)

Even though industrial harvesting equipment is sometimes also referred to as canntech, this term is mostly used to categorize software or devices that disrupt the cannabis market for direct consumers

Being a fairly new space, just recently legalized in several countries, cannabis still offers multiple ways for entrepreneurs to enter the market and fight for consumers attention. By far, there are no established technological companies in canntech like Uber for drives and Airbnb for vacation rentals, that managed to capture a huge chunk of the market segment. Just as well, it provides many investment opportunities to those willing to place their bets on particular niche solutions and tech devices.

Cannabis consumption devices

There are different ways to consume cannabis, including hand pipes, rolling papers, edibles and oils, vaporization and more. 

Vaporizers are getting increasingly popular due to reducing potentially harmful effect of smoking and its odor. These devices heat cannabis to a temperature that is high enough to extract cannabinoids and make it convenient to doze it.

Selective-doze devices make a special segment in medical cannabis: dose pens (Dosist) and metered dose vaporizers (Syqe medical) are utilized for medicinal purposes to ensure right dosage for patients. Breathalyzers that detect THC and other cannabinoid levels from breath samples are also the important segment of medical canntech market (Hound Labs).

Innovative methods to consume cannabis attract interest from VC and private equity firms: for example, this year PAX Labs (vaporizer developer) raised $420 million from Tao Capital Partners, Tiger Global Management and other investors.

Sales and delivery software

Cannabis production market in the U.S. is considered crowded. At the same time there is a lack of technology that links producers and consumers in countries where marijuana has a legal status. This creates a tremendous market opportunity for sales and delivery tech solutions. 

One of the current leaders of this market in the U.S. is Eaze – technology platform for cannabis delivery. Unlike chains like MedMen that offer on-demand delivery from their own stores, Eaze connects various dispensaries with consumers through their delivery app.

In late 2018 Eaze raised an impressive $65 million in its series C, making it the biggest company aiming to become the “Uber of Pot”.

Hardware for growing cannabis at home

Cannabis home grow systems have recently started to attract attention of general public and capital from investors. 

Companies that offer solutions for home growth of various plants started to introduce modules for cannabis cultivation as early as 2017 (Cloudponics); there are also startups focused entirely on cannabis, including GreenGoddess and Leaf, backed by $4.5 million in funding.

Learn more

Valuation420 helps you stay updated and learn more about investing in one of fastest growing industries – from the basics to expert opinions and analytics. 

Stobox is developing the platform for tokenized investment in most promising startups on the cannabis market, including canntech companies.

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